In a scenario like this and say you’re an employee with your own money in the system. Is it illegal to take out exactly what you’re owed on the way out and before proceedings prevent such action?
Yes, because they're company funds, not yours. By definition, a bankrupt company has less assets than liabilities, so the liquidation process is about splitting them up equitably.
That makes sense. What I was thinking though is that the company turned off withdrawals. Are they required to do that? What’s the threshold? Because couldn’t an employee just flip the switch back on and withdraw like any other customer? (That clearly didn’t happen here though.)
It’s a curiosity to me about how these things all go down in a broader sense. Because clearly something went way wrong at FTX. But are authorities swooping in, as in literally and physically, at this point? It seems all sorts of shenanigans could be happening in the offices, which to my understanding is also where they live or close to it (at least some of the offices).
It’s like authorities know a figurative bloodbath is going on, but for these financial crimes, the response is a bit slower than a literal bloodbath.
You could flip all kind of switches as employee. This are not technical constraints, but legal ones.
Going by the twitter accounts of some (ex)FTX employees, they have not yet realized what might be coming their way. I.e it doesn't matter if authorities are busting down your door right now, whatever you say or do now can have implications.
> Going by the twitter accounts of some (ex)FTX employees, they have not yet realized what might be coming their way. I.e it doesn't matter if authorities are busting down your door right now, whatever you say or do now can have implications.
Certainly anyone in their situation should have personally lawyered up days ago, no matter what level of employee. Even if I was a low-level employee with absolutely no proper knowledge of this stuff, I would lawyer up because the people at the top will look for any scapegoat.
There’s a nagging curiosity, that likely everyone shares, about having a play by play of what actually happened during this week (after the downfall) and what should have happened.
Yes, spoke with a lawyer about legality of getting funds if the exchange in one way or another (not hacking in this case). The tldr is that once the insolvency is known, if you take your entire “share” you’re really taking some share that belongs to the rest of the folks ftx can’t serve and there might be clawbacks.
Doing so via unauthorized withdrawals almost certainly adds a layer of actual crime?
If you’re a company insider technically speaking you’re not allowed to take a dime out of a company for personal gain/reimbursement starting the moment you become aware of the company’s insolvency.
I see what you mean, but is it insider information in this case? From my understanding, many (most?) employees found out about it via published news articles.
I am making no reference to insider information at all.
The relevant fact is the company’s insolvency.
If you’re in an executive position at a company, and you know the company is insolvent, and you’re appropriating company funds for yourself, you’re breaking the law. It doesn’t matter if the company owes you that money.
There’s a little subtlety here of course but this wouldn’t be an example of that.
